Not Quite Enough

If you are state budget aficionado, you may recall that last June there was a disagreement between Governor Brown and the legislative leaders as to whether to use a conservative forecast for 2013-14 state revenue. The governor pushed for, and ultimately won, the use of more conservative forecast revenue than the LAO and the legislative leaders wanted to use.

We are now two months into the fiscal year and according to the state controller, actual revenue received was below the governor’s estimate by something over $300 million. In addition, the state is looking at some unexpected spending for such things as housing prisoners to comply with federal court action, fire suppression, etc. Two months does not a year make and July-August are not big revenue months. However, the results are a reminder that the state is still vulnerable to negative shocks.